John Hilsenrath at the Wall Street Journal does a nice job of reviewing and summarizing the dueling speeches of 3 Fed officials today. Not only are they in disagreement about what the Fed should do next, they don’t even seem to be able to agree on what exactly the economy is doing. What else is new?
They should be worried about their credibility.
How can these guys know what to do next when they don’t even have a clue about what the economy is doing right now, let alone what it’s going to do a few month’s down the road? Back in July I did a review of the forecasts of the FOMC members and district bank presidents going back to 2007, as reported in the FOMC meeting minutes. Not once did even one of these “expert” economic manipulators get even the current unemployment rate or GDP rate correct. Their forecasts for the future were even further off the mark. I was forced to conclude that they were either suffering from delusional groupthink (I know they’re not stupid), or deliberately lying.
This was my review of the FOMC’s quarterly surveys of its members and district presidents since 2007. Their opinions serve as the basis for the FOMC meeting statement.
Ironically, Consumer Confidence surveys show that everyday Americans have a far better idea of what’s going on and what to expect than do the experts attempting to manage the financial system.
When the people pulling the economic levers know less than the man in the street, we’re doomed.